(1)This section applies where—
(a)an insurance company (“the company”) enters into a contract of reinsurance which is a relevant financial reinsurance contract, and
(b)[F2condition A] is met.
(2)A contract of reinsurance is a relevant financial reinsurance contract if, under the contract—
(a)some or all of the liabilities reinsured may cease to be reinsured (without the cedant having any right of recovery against the reinsurer), or
(b)the cedant may become liable to pay premiums wholly or partly determined (directly or indirectly) by reference to any amount which the reinsurer becomes liable to pay to the cedant under the contract.
(3)Condition A is that the reduction in the company’s liabilities resulting from the reinsurance under the relevant financial reinsurance contract is not taken into account in calculating the profits of the company.
F3(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F3(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6)The reinsurance offset amount for each period of account of the company beginning before the termination of the relevant financial reinsurance contract is to be taken into account as a receipt of the period of account.
(7)The reinsurance offset amount for a period of account is the amount of any decrease in the period of account in the difference between the full liabilities and the reduced liabilities where—
(a)“the full liabilities” is the amount which would be brought into account for the period as liabilities but for the relevant financial reinsurance contract, and
(b)“the reduced liabilities” is the amount of the liabilities actually so brought into account.
F4(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F4(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]
Textual Amendments
F1S. 82C inserted (with effect in accordance with Sch. 7 para. 5(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 7 para. 5(2)
F2Words in s. 82C(1)(b) substituted (with effect in accordance with Sch. 9 para. 11(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 9 para. 11(2)
F3S. 82C(4)(5) repealed (with effect in accordance with Sch. 9 para. 11(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 9 para. 11(3), Sch. 11 Pt. 2(10)
F4S. 82C(8)(9) repealed (with effect in accordance with Sch. 9 para. 11(4) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 9 para. 11(3), Sch. 11 Pt. 2(10)